First Business Bank Announces Fourth Quarter 2025 Financial Results and 17% Cash Dividend Increase

MADISON, Wis.--( BUSINESS WIRE)--First Business Financial Services, Inc. (the “Company”, the “Bank”, or “First Business Bank”) (Nasdaq: FBIZ) reported quarterly net income available to common shareholders of $13.1 million, or earnings per share ("EPS") of $1.58. This compares to net income available to common shareholders of $14.2 million, or $1.70 per share, in the third quarter of 2025 and $14.2 million, or $1.71 per share, in the fourth quarter of 2024.

“First Business Bank continued to produce strong deposit and loan growth that outpaced the industry, expanding client relationships and driving outstanding financial performance during the fourth quarter,” said Corey Chambas, Chief Executive Officer. “We concluded 2025 with positive momentum. Our revenue growth goals continued to be supported by robust loan pipelines, expansion of our private wealth platform, core deposit growth, and diversified fee income sources. While we saw an increase in nonperforming loans due to a single client relationship, we continue to experience stable credit quality across our performing portfolio. We are pleased to report strong profitability despite this isolated event. We are on track with our five-year strategic plan, achieving 10% growth in top-line revenue and maintaining an efficiency ratio below 60%. This momentum continued to drive above-target performance on return on average tangible common equity and growth in tangible book value for 2025."

“We continued our track record of producing double-digit annual growth, exceeding 14% growth in both pre-tax, pre-provision adjusted earnings and earnings per share in 2025," Chambas continued. "We are particularly proud that we have sustained 10% compound average annual growth in earnings per share for the past 20 years. This consistent growth in earnings has supported our ability to provide shareholders a strong cash dividend that has grown for 14 consecutive years. We continue to target double-digit growth going forward."

Quarterly Highlights

Quarterly Financial Results

(Unaudited)

As of and for the Three Months Ended

As of and for the Year Ended

(Dollars in thousands, except per share amounts)

December 31,

2025

September 30,

2025

December 31,

2024

December 31,

2025

December 31,

2024

Net interest income

$34,762

$34,886

$33,148

$136,690

$124,206

Adjusted non-interest income (1)

7,461

9,406

8,005

31,703

29,259

Operating revenue (1)

42,223

44,292

41,153

168,393

153,465

Operating expense (1)

23,901

25,440

23,434

98,983

93,016

Pre-tax, pre-provision adjusted earnings (1)

18,322

18,852

17,719

69,410

60,449

Less:

Provision for credit losses

1,855

1,440

2,701

8,655

8,827

Net loss on repossessed assets

—

168

Contribution to First Business Charitable Foundation

—

234

—

234

—

SBA recourse benefit

—

(5)

(687)

(64)

(104)

Impairment of tax credit investments

229

—

400

339

400

Add:

Bank-owned life insurance claim

—

234

—

234

—

Net loss on sale of securities

—

(8)

Income before income tax expense

16,238

17,386

15,300

60,453

51,150

Income tax expense

2,905

2,993

885

10,134

6,905

Net income

$13,333

$14,393

$14,415

$50,319

$44,245

Preferred stock dividends

219

218

219

875

Net income available to common shareholders

$13,114

$14,175

$14,196

$49,444

$43,370

Earnings per share, diluted

$1.58

$1.70

$1.71

$5.94

$5.20

Book value per share

$43.19

$41.60

$38.17

$43.19

$38.17

Tangible book value per share (1)

$41.75

$40.16

$36.74

$41.75

$36.74

Net interest margin (2)

3.53%

3.68%

3.77%

3.64%

3.66%

Fee income ratio (non-interest income / total revenue)

17.67%

21.65%

19.45%

18.94%

19.06%

Efficiency ratio (1)

56.61%

57.44%

56.94%

58.78%

60.61%

Return on average assets (2)

1.25%

1.40%

1.52%

1.24%

1.20%

Return on average tangible common equity (2)

14.83%

17.29%

19.21%

15.25%

15.35%

Period-end loans and leases receivable

$3,373,241

$3,334,956

$3,113,128

$3,373,241

$3,113,128

Average loans and leases receivable

$3,363,752

$3,295,880

$3,103,703

$3,271,872

$2,996,881

Period-end core deposits

$2,673,003

$2,592,110

$2,396,429

$2,673,003

$2,396,429

Average core deposits

$2,765,730

$2,597,031

$2,416,919

$2,531,828

$2,378,465

Allowance for credit losses, including unfunded commitment reserves

$37,692

$38,382

$37,268

$37,692

$37,268

Non-performing assets

$43,855

$23,513

$28,418

$43,855

$28,418

Allowance for credit losses as a percent of total gross loans and leases

1.12%

1.15%

1.20%

1.12%

1.20%

Non-performing assets as a percent of total assets

1.07%

0.58%

0.74%

1.07%

0.74%

Fourth Quarter 2025 Compared to Third Quarter 2025

Net interest income decreased $124,000, or 0.4%, to $34.8 million.

The Bank reported provision for credit losses of $1.9 million compared to $1.4 million in the linked quarter. The current quarter provision primarily reflects net charge-offs and loan growth, partially offset by improvement in the economic outlook in our model forecast and a decrease in general reserve qualitative factors. Specific reserves were flat reflecting a decrease in reserve requirements in equipment finance lending offset by an increase in reserves in accounts receivable financing.

Non-interest income decreased $2.2 million, or 22.6%, to $7.5 million.

Non-interest expense decreased $1.6 million, or 6.1%, to $24.1 million, while operating expense decreased $1.5 million, or 6.0%, to $23.9 million.

Income tax expense decreased $88,000 to $2.9 million. The effective tax rate was 17.9% for the three months ended December 31, 2025, compared to 17.2% for the linked quarter. The change in tax expense reflects a decrease in pre-tax income and updated tax credit partnership estimates. The effective tax rate for the year ended December 31, 2025 was 16.8%. The Company expects to report an effective tax rate between 16% and 18% for 2026.

Total period-end loans and leases receivable increased $38.6 million, or 4.6% annualized, to $3.375 billion. Loan growth was muted due to elevated commercial real estate loan payoffs in the second half of 2025. The average rate earned on average loans and leases receivable was 6.77%, down 33 basis points from 7.10% in the prior quarter. Excluding the non-accrual interest reversals and recoveries, the average rate earned on average loans and leases receivable was 6.87% compared to 7.06% in the linked quarter.

Total period-end core deposits increased $80.9 million, or 12.5% annualized, to $2.673 billion. The average rate paid was 2.64%, down 25 basis points from 2.89% in the prior quarter primarily due to a decrease in short-term market rates.

Period-end wholesale funding, including FHLB advances and brokered deposits, decreased $48.2 million, or 5.1%, to $904.7 million due to an increase in core deposits. Consistent with the Bank’s long-held philosophy to minimize exposure to interest rate risk, management will continue to utilize the most efficient and cost-effective source of wholesale funds to match-fund fixed-rate loans, as necessary.

Non-performing assets increased $20.3 million to $43.9 million, or 1.07% of total assets, compared to 0.58% in the prior quarter. The increase primarily reflects the downgrade of $20.4 million of CRE loans from a single southeast Wisconsin-based client relationship. Management has evaluated the Bank's collateral position of these loans and concluded no specific reserves are required. This increase in non-performing assets was partially offset by lower non-accrual equipment finance loans.

The allowance for credit losses, including the unfunded credit commitments reserve, decreased $690,000, or 1.8%, primarily due to decreases in general reserves due to an improvement in the economic outlook in our model forecast, improvement in qualitative factors, and a decrease in specific reserves, partially offset by loan growth, general reserve model updates, and an increase in unfunded commitment reserves. The allowance for credit losses, including unfunded credit commitment reserves, as a percent of total gross loans and leases was 1.12% compared to 1.15% in the prior quarter.

Fourth Quarter 2025 Compared to Fourth Quarter 2024

Net interest income increased $1.6 million, or 4.9%, to $34.8 million.

The Company reported provision for credit losses of $1.9 million, compared to $2.7 million in the fourth quarter of 2024. See the Provision for Credit Loss breakdown table below for more detail.

Non-interest income decreased $544,000, or 6.8%, to $7.5 million.

Non-interest expense increased $978,000, or 4.2%, to $24.1 million. Operating expense increased $467,000 or 2.0%, to $23.9 million.

Total period-end loans and leases receivable increased $261.4 million, or 8.4%, to $3.375 billion. The average yield decreased 44 basis points to 6.77%, primarily due to a decrease in short-term market rates and the aforementioned non-accrual interest reversal. Excluding the non-accrual interest reversal, average yield was 6.87%.

Total period-end core deposits grew $276.6 million, or 11.5%, to $2.673 billion. The average rate paid decreased 34 basis points to 2.64%, reflecting a decrease in short-term market rates.

Period-end wholesale funding decreased $71.3 million, or 7.3%, to $904.7 million.

Non-performing assets increased to $43.9 million, or 1.07% of total assets, compared to $28.4 million, or 0.74% of total assets, primarily driven by the downgrade of $20.4 million of CRE loans from a single client relationship, partially offset by lower non-accrual equipment finance loans.

The allowance for credit losses, including unfunded commitment reserves, increased $424,000 to $37.7 million primarily due to higher general reserves as a result of loan growth and quantitative factors, partially offset by lower specific reserves. The allowance for credit losses as a percent of total gross loans and leases was 1.12%, compared with 1.20% in the prior year.

Dividend Increase Announced

On January 29, 2026, the Company's Board of Directors declared a quarterly cash dividend on its common stock of $0.34 per share, which is equivalent to a dividend yield of 2.45% based on the market close price of $55.44 on Wednesday, January 28, 2026. The quarterly dividend represents a 17% increase over the quarterly dividend declared in October 2025 and marks the 14 th consecutive annual dividend raise. Based on fourth quarter 2025 earnings per share, this represents a dividend payout ratio of 22%. This regular cash dividend is payable on February 28, 2026, to shareholders of record at the close of business on February 14, 2026.

The Board of Directors also declared a dividend on the Company’s 7% Series A Preferred Stock of $17.50 per share, payable on March 16, 2026, to shareholders of record on February 27, 2026.

2026 CEO Succession Plan

On May 5, 2025, the Company announced that Corey A. Chambas intends to retire from his role as Chief Executive Officer on May 2, 2026. The Company will name President and Chief Operating Officer David R. Seiler to succeed him as President and CEO effective the same date.

Earnings Release Supplement and Conference Call

On January 29, 2026, the Company posted an earnings release supplement to its website firstbusiness.bank under the “Investor Relations” tab which will also be furnished to the U.S. Securities and Exchange Commission on January 29, 2026. The information included in the supplement provides an overview of the Company’s recent operating performance, financial condition, and other data relevant to the quarter. The Company intends to use this supplement in connection with its fourth quarter 2025 earnings call to be held at 1:00 p.m. Central time on January 30, 2026. The conference call can be accessed at 800-549-8228 (646-564-2877 if outside the United States and Canada), using the conference call access code: FBIZ, 15092. Investors may also listen live via webcast at: https://events.q4inc.com/attendee/437898665. A replay of the call will be available through Friday, February 6, 2026, by calling 888-660-6264 (646-517-3975 if outside the United States and Canada). The webcast archive of the conference call will be available on the Company’s website, ir.firstbusiness.bank.

About First Business Bank

First Business Bank ® specializes in Business Banking, including Commercial Banking and Specialty Finance, Private Wealth, and Bank Consulting services, and through its refined focus delivers unmatched expertise, accessibility, and responsiveness. Specialty Finance solutions are delivered through First Business Bank’s wholly owned subsidiary First Business Specialty Finance, LLC ®. First Business Bank is a wholly owned subsidiary of First Business Financial Services, Inc ®. (Nasdaq: FBIZ). For additional information, visit firstbusiness.bank.

This release may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which reflect First Business Bank’s current views with respect to future events and financial performance. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results, or other developments. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, uncertainties, and other factors that may cause actual results to differ materially from the views, beliefs, and projections expressed in such statements. Such statements are subject to risks and uncertainties, including among other things:

For further information about the factors that could affect the Company’s future results, please see the Company’s annual report on Form 10-K for the year ended December 31, 2024, and other filings with the Securities and Exchange Commission.

SELECTED FINANCIAL CONDITION DATA

(Unaudited)

As of

(in thousands)

December 31,

2025

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

Assets

Cash and cash equivalents

$39,485

$44,349

$123,208

$170,617

$157,702

Securities available-for-sale, at fair value

422,087

411,111

382,365

359,394

341,392

Securities held-to-maturity, at amortized cost

5,210

5,584

5,714

6,590

6,741

Loans held for sale

18,849

13,482

12,415

10,523

13,498

Loans and leases receivable

3,373,241

3,334,956

3,250,925

3,184,400

3,113,128

Allowance for credit losses

(35,877)

(36,690)

(36,861)

(35,236)

(35,785)

Loans and leases receivable, net

3,337,364

3,298,266

3,214,064

3,149,164

3,077,343

Premises and equipment, net

4,669

4,936

5,063

5,017

5,227

Repossessed assets

—

Right-of-use assets

5,317

5,577

5,713

5,439

5,702

Bank-owned life insurance

83,994

83,255

82,761

57,647

57,210

Federal Home Loan Bank stock, at cost

8,940

9,605

10,027

10,434

11,616

Goodwill and other intangible assets

11,985

12,041

12,049

12,058

11,912

Derivatives

36,515

37,634

40,814

48,405

65,762

Accrued interest receivable and other assets

107,472

109,005

108,501

109,555

99,059

Total assets

$4,081,887

$4,034,845

$4,002,725

$3,944,879

$3,853,215

Liabilities and Stockholders’ Equity

Core deposits

$2,673,003

$2,592,110

$2,533,099

$2,462,695

$2,396,429

Wholesale deposits

707,412

740,961

772,123

780,348

710,711

Total deposits

3,380,415

3,333,071

3,305,222

3,243,043

3,107,140

Federal Home Loan Bank advances and other borrowings

252,051

266,677

276,131

286,590

320,049

Lease liabilities

7,361

7,687

7,887

7,604

7,926

Derivatives

36,926

38,726

41,228

45,612

57,068

Accrued interest payable and other liabilities

33,549

30,365

27,462

25,967

32,443

Total liabilities

3,710,302

3,676,526

3,657,930

3,608,816

3,524,626

Total stockholders’ equity

371,585

358,319

344,795

336,063

328,589

Total liabilities and stockholders’ equity

$4,081,887

$4,034,845

$4,002,725

$3,944,879

$3,853,215

STATEMENTS OF INCOME

(Unaudited)

As of and for the Three Months Ended

As of and for the Year Ended

(Dollars in thousands, except per share amounts)

December 31,

2025

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

December 31,

2025

December 31,

2024

Total interest income

$62,752

$63,746

$61,282

$59,530

$60,110

$247,310

$233,130

Total interest expense

27,990

28,860

27,498

26,272

26,962

110,620

108,924

Net interest income

34,762

34,886

33,784

33,258

33,148

136,690

124,206

Provision for credit losses

1,855

1,440

2,701

2,659

2,701

8,655

8,827

Net interest income after provision for credit losses

32,907

33,446

31,083

30,599

30,447

128,035

115,379

Private wealth management service fees

3,788

3,687

3,748

3,492

3,426

14,716

13,262

Gain on sale of SBA loans

140

382

397

963

938

1,882

1,942

Service charges on deposits

1,188

1,151

1,103

1,048

960

4,491

3,771

Loan fees

410

501

424

388

914

1,724

3,399

Bank owned life insurance income

739

965

615

437

418

2,755

1,649

Loss on sale of securities

—

(8)

Swap fees

738

974

170

113

588

1,995

1,403

Other non-interest income

458

1,980

798

1,138

761

4,374

3,833

Total non-interest income

7,461

9,640

7,255

7,579

8,005

31,937

29,251

Compensation

17,151

17,442

16,534

16,747

15,535

67,874

63,105

Occupancy

581

567

564

590

588

2,303

2,373

Professional fees

1,001

1,071

1,487

1,459

1,323

5,018

5,671

Data processing

1,158

1,123

1,368

1,082

1,647

4,732

4,892

Marketing

938

876

1,062

968

928

3,844

3,518

Equipment

374

296

335

376

301

1,381

1,314

Computer software

1,902

1,826

1,656

1,603

1,585

6,987

6,166

FDIC insurance

800

817

834

780

728

3,231

2,760

Other non-interest expense

225

1,682

1,128

1,114

517

4,149

3,681

Total non-interest expense

24,130

25,700

24,968

24,719

23,152

99,519

93,480

Income before income tax expense

16,238

17,386

13,370

13,459

15,300

60,453

51,150

Income tax expense

2,905

2,993

1,948

2,288

885

10,134

6,905

Net income

$13,333

$14,393

$11,422

$11,171

$14,415

$50,319

$44,245

Preferred stock dividends

219

218

219

875

Net income available to common shareholders

$13,114

$14,175

$11,203

$10,952

$14,196

$49,444

$43,370

Per common share:

Basic earnings

$1.58

$1.70

$1.35

$1.32

$1.71

$5.94

$5.20

Diluted earnings

1.58

1.70

1.35

1.32

1.71

5.94

5.20

Dividends declared

0.29

0.25

1.16

1.00

Book value

43.19

41.60

39.98

39.04

38.17

43.19

38.17

Tangible book value

41.75

40.16

38.54

37.58

36.74

41.75

36.74

Weighted-average common shares outstanding (1)

8,173,059

8,171,404

8,141,159

8,130,743

8,107,308

8,158,208

8,148,259

Weighted-average diluted common shares outstanding (1)

8,173,059

8,171,404

8,141,159

8,130,743

8,107,308

8,158,208

8,148,259

(1) Excluding participating securities.

NET INTEREST INCOME ANALYSIS

(Unaudited)

For the Three Months Ended

(Dollars in thousands)

December 31, 2025

September 30, 2025

December 31, 2024

Average

Balance

Interest

Average

Yield/Rate (4)

Average

Balance

Interest

Average

Yield/Rate (4)

Average

Balance

Interest

Average

Yield/Rate (4)

Interest-earning assets

Commercial real estate and other mortgage loans (1)

$2,039,138

$31,063

6.09%

$1,986,541

$31,819

6.41%

$1,879,136

$30,580

6.51%

Commercial and industrial loans (1)

1,280,406

25,222

7.88

1,259,448

26,009

8.26

1,176,175

24,709

8.40

Consumer and other loans (1)

44,208

631

5.71

49,891

672

5.39

48,392

663

5.48

Total loans and leases receivable (1)

3,363,752

56,916

6.77

3,295,880

58,500

7.10

3,103,703

55,952

7.21

Mortgage-related securities (2)

366,158

3,894

4.25

350,971

3,745

4.27

290,471

2,858

3.94

Other investment securities (3)

49,716

282

2.27

47,367

266

2.25

45,174

231

2.05

FHLB stock

8,614

202

9.38

9,420

225

9.55

11,788

274

9.30

Short-term investments

145,425

1,458

4.01

90,852

1,010

4.45

65,254

795

4.87

Total interest-earning assets

3,933,665

62,752

6.38

3,794,490

63,746

6.72

3,516,390

60,110

6.84

Non-interest-earning assets

247,676

249,026

230,218

Total assets

$4,181,341

$4,043,516

$3,746,608

Interest-bearing liabilities

Transaction accounts

$1,108,916

8,357

3.01

$1,050,822

8,809

3.35%

$928,428

8,161

3.52%

Money market

920,194

7,002

3.04

851,659

7,183

3.37

833,501

7,571

3.63

Certificates of deposit

299,349

2,907

3.88

278,191

2,751

3.96

210,307

2,282

4.34

Wholesale deposits

725,607

7,330

4.04

754,690

7,595

4.03

594,578

6,106

4.11

Total interest-bearing deposits

3,054,066

25,596

3.35

2,935,362

26,338

3.59

2,566,814

24,120

3.76

FHLB advances

189,900

1,510

3.18

207,762

1,639

3.16

270,476

1,969

2.91

Other borrowings

54,787

883

6.45

54,761

883

6.45

54,672

874

6.39

Total interest-bearing liabilities

3,298,753

27,989

3.39

3,197,885

28,860

3.61

2,891,962

26,963

3.73

Non-interest-bearing demand deposit accounts

437,271

416,359

444,683

Other non-interest-bearing liabilities

79,505

77,300

90,555

Total liabilities

3,815,529

3,691,544

3,427,200

Stockholders’ equity

365,812

351,972

319,408

Total liabilities and stockholders’ equity

$4,181,341

$4,043,516

$3,746,608

Net interest income

$34,763

$34,886

$33,147

Interest rate spread

2.99%

3.11%

Net interest-earning assets

$634,912

$596,605

$624,428

Net interest margin

3.53%

3.68%

3.77%

(1)

The average balances of loans and leases include non-accrual loans and leases and loans held for sale. Interest income related to non-accrual loans and leases is recognized when collected. Interest income includes net loan fees collected in lieu of interest.

(2)

Includes amortized cost basis of assets available for sale and held to maturity.

(3)

Yields on tax-exempt municipal obligations are not presented on a tax-equivalent basis in this table.

(4)

Represents annualized yields/rates.

For the Year Ended December 31,

2025

2024

2023

Average

Balance

Interest

Average

Yield/

Rate

Average

Balance

Interest

Average

Yield/

Rate

Average

Balance

Interest

Average

Yield/

Rate

(Dollars in Thousands)

Interest-earning assets

Commercial real estate and other mortgage loans (1)

$1,971,337

$123,113

6.25%

$1,793,041

$118,339

6.60%

$1,586,967

$98,370

6.20%

Commercial and industrial loans (1)

1,252,779

101,562

8.11%

1,153,955

95,782

8.30%

1,013,866

81,963

8.08%

Consumer and other loans (1)

47,756

2,636

5.52%

49,885

2,777

5.57%

47,018

2,316

4.93%

Total loans and leases receivable (1)

3,271,872

227,311

6.95%

2,996,881

216,898

7.24%

2,647,851

182,649

6.90%

Mortgage-related securities (2)

340,173

14,368

4.22%

266,098

10,405

3.91%

200,383

6,433

3.21%

Other investment securities (3)

46,681

1,007

2.16%

56,301

1,507

2.68%

62,921

1,770

2.81%

FHLB and FRB stock

11,109

1,016

9.15%

12,167

1,133

9.31%

15,162

1,231

8.12%

Short-term investments

85,305

3,608

4.23%

59,853

3,186

5.32%

54,311

2,845

5.24%

Total interest-earning assets

3,755,140

247,310

6.59%

3,391,300

233,129

6.87%

2,980,628

194,928

6.54%

Non-interest-earning assets

244,738

234,973

231,521

Total assets

$3,999,878

$3,626,273

$3,212,149

Interest-bearing liabilities

Transaction accounts

$1,018,735

$32,543

3.19%

$884,321

$33,796

3.82%

$689,500

$23,727

3.44%

Money market accounts

856,554

27,726

3.24%

815,603

32,180

3.95%

681,336

22,129

3.25%

Certificates of deposit

236,848

9,238

3.90%

237,228

10,879

4.59%

273,387

11,209

4.10%

Wholesale deposits

737,253

29,701

4.03%

515,197

21,066

4.09%

346,285

14,353

4.14%

Total interest-bearing deposits

2,849,390

99,208

3.48%

2,452,349

97,921

3.99%

1,990,508

71,418

3.59%

FHLB advances

246,485

7,880

3.20%

282,437

7,719

2.73%

351,990

8,881

2.52%

Other borrowings

54,748

3,532

6.45%

51,072

3,284

6.43%

38,891

2,041

5.25%

Total interest-bearing liabilities

3,150,623

110,620

3.51%

2,785,858

108,924

3.91%

2,381,389

82,340

3.46%

Non-interest-bearing demand deposit accounts

419,691

441,313

453,930

Other non-interest-bearing liabilities

81,427

92,708

102,668

Total liabilities

3,651,741

3,319,879

2,937,987

Stockholders’ equity

348,137

306,394

274,162

Total liabilities and stockholders’ equity

$3,999,878

$3,626,273

$3,212,149

Net interest income

$136,690

$124,205

$112,588

Interest rate spread

3.07%

2.96%

3.08%

Net interest-earning assets

$604,517

$605,442

$599,239

Net interest margin

3.64%

3.66%

3.78%

Average interest-earning assets to average interest-bearing liabilities

119.19%

121.73%

125.16%

Return on average assets

1.24%

1.20%

1.13%

Return on average tangible common equity

15.25%

15.35%

14.46%

Average equity to average assets

8.70%

8.45%

8.54%

Non-interest expense to average assets

2.49%

2.58%

2.76%

(1)

(2)

Includes amortized cost basis of assets available for sale and held to maturity.

(3)

Yields on tax-exempt municipal obligations are not presented on a tax-equivalent basis in this table.

(4)

Represents annualized yields/rates.

BETA ANALYSIS

For the Three Months Ended

For the Year Ended

(Unaudited)

December 31, 2025

September 30, 2025

December 31, 2024

December 31, 2025

December 31, 2024

Average Yield/Rate (3)

Increase (Decrease)

Average Yield/Rate (3)

Increase (Decrease)

Average Yield/Rate

Increase (Decrease)

Total loans and leases receivable (a)(1)

6.87%

7.06%

(0.19)%

7.20%

(0.33)%

6.96%

7.23%

(0.27)%

Total interest-earning assets (b)(1)

6.47%

6.69%

(0.22)%

6.82%

(0.35)%

6.60%

6.87%

(0.27)%

Total core deposits (e)

2.64%

2.89%

(0.25)%

2.98%

(0.34)%

2.75%

3.23%

(0.48)%

Total bank funding (f)

2.95%

3.14%

(0.19)%

3.18%

(0.23)%

3.05%

3.33%

(0.28)%

Net interest margin (g)(1)

3.63%

3.64%

(0.02)%

3.76%

(0.13)%

3.65%

3.66%

(0.01)%

—

Effective fed funds rate (2)(i)

3.90%

4.30%

(0.40)%

4.65%

(0.75)%

4.21%

5.14%

(0.93)%

Beta Calculations:

Total loans and leases receivable (a)/(i)

46.7%

43.4%

29.0%

Total interest-earning assets (b)/(i)

54.1%

46.7%

29.0%

Total core deposits (e/i)

62.5%

45.3%

51.6%

Total bank funding (f)/(i)

47.5%

30.7%

30.1%

Net interest margin (g/i)

4.6%

17.9%

1.1%

PROVISION FOR CREDIT LOSS COMPOSITION

(Unaudited)

For the Three Months Ended

For the Twelve Months Ended

(Dollars in thousands)

December 31,

2025

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

December 31,

2025

December 31,

2024

Change due to qualitative factor changes

$(538)

$(243)

$590

$(355)

$(460)

$(546)

$332

Change due to quantitative factor changes

(607)

(173)

746

1,560

(598)

1,526

(977)

Charge-offs

2,809

1,708

1,338

3,810

1,132

9,665

5,255

Recoveries

(264)

(440)

(332)

(398)

(190)

(1,434)

(699)

Change in reserves on individually evaluated loans, net

(76)

(550)

(247)

(2,495)

2,579

(3,368)

2,928

Change due to loan growth, net

408

795

536

741

577

2,480

2,227

Change in unfunded commitment reserves

123

343

(204)

(339)

332

(239)

Total provision for credit losses

$1,855

$1,440

$2,701

$2,659

$2,701

$8,655

$8,827

ALLOWANCE FOR CREDIT LOSS COMPOSITION

As of

December 31,

2025

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

(In Thousands)

% of Total

Loans and

Leases

(In Thousands)

% of Total

Loans and

Leases

(In Thousands)

% of Total

Loans and

Leases

(In Thousands)

% of Total

Loans and

Leases

(In Thousands)

% of Total

Loans and

Leases

Allowance for credit losses:

Loans collectively evaluated

$30,327

0.90%

$31,065

0.93%

$30,685

0.94%

$28,813

0.90%

$26,867

0.86%

Loans individually evaluated

5,550

0.16%

5,625

0.17%

6,176

0.19%

6,423

0.20%

8,918

0.29%

Unfunded commitments reserve

1,815

1,692

1,349

1,279

1,483

Total

37,692

1.12%

38,382

1.15%

38,210

1.18%

36,515

1.15%

37,268

1.20%

Loans and lease receivables:

$3,373,241

$3,334,956

$3,250,925

$3,184,400

$3,113,128

PERFORMANCE RATIOS

For the Three Months Ended

For the Twelve Months Ended

(Unaudited)

December 31,

2025

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

December 31,

2025

December 31,

2024

Return on average assets (annualized)

1.25%

1.40%

1.14%

1.52%

1.24%

1.20%

Return on average tangible common equity (annualized)

14.83%

17.29%

14.17%

14.13%

19.21%

15.25%

15.35%

Efficiency ratio

56.61%

57.44%

60.97%

60.28%

56.94%

58.78%

60.61%

Interest rate spread

2.99%

3.11%

3.10%

3.11%

3.07%

2.96%

Net interest margin

3.53%

3.68%

3.67%

3.69%

3.77%

3.64%

3.66%

Average interest-earning assets to average interest-bearing liabilities

119.25%

118.66%

118.94%

119.95%

121.59%

119.19%

121.73%

ASSET QUALITY RATIOS

(Unaudited)

As of

(Dollars in thousands)

December 31,

2025

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

Non-accrual loans and leases

$43,855

$23,513

$28,633

$24,056

$28,367

Repossessed assets

—

Total non-performing assets

$43,855

$23,513

$28,664

$24,092

$28,418

Non-accrual loans and leases as a percent of total gross loans and leases

1.30%

0.70%

0.88%

0.76%

0.91%

Non-performing assets as a percent of total gross loans and leases plus repossessed assets

1.30%

0.70%

0.88%

0.76%

0.91%

Non-performing assets as a percent of total assets

1.07%

0.58%

0.72%

0.61%

0.74%

Allowance for credit losses as a percent of total gross loans and leases

1.12%

1.15%

1.18%

1.15%

1.20%

Allowance for credit losses as a percent of non-accrual loans and leases

85.95%

163.24%

133.45%

151.79%

131.38%

NET CHARGE-OFFS (RECOVERIES)

(Unaudited)

For the Three Months Ended

For the Twelve Months Ended

(Dollars in thousands)

December 31,

2025

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

December 31,

2025

December 31,

2024

Charge-offs

$2,809

$1,708

$1,338

$3,810

$1,132

$9,665

$5,255

Recoveries

(264)

(440)

(332)

(398)

(190)

(1,434)

(699)

Net charge-offs (recoveries)

$2,545

$1,268

$1,006

$3,412

$942

$8,231

$4,556

Net charge-offs (recoveries) as a percent of average gross loans and leases (annualized)

0.30%

0.15%

0.12%

0.43%

0.12%

0.25%

0.15%

CAPITAL RATIOS

As of and for the Three Months Ended

(Unaudited)

December 31,

2025

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

Total capital to risk-weighted assets

12.24%

12.18%

12.25%

12.20%

12.08%

Tier I capital to risk-weighted assets

9.79%

9.67%

9.66%

9.60%

9.45%

Common equity tier I capital to risk-weighted assets

9.48%

9.34%

9.33%

9.26%

9.10%

Tier I capital to adjusted assets

8.86%

8.87%

8.82%

8.77%

8.78%

Tangible common equity to tangible assets

8.54%

8.31%

8.04%

7.93%

LOAN AND LEASE RECEIVABLE COMPOSITION

(Unaudited)

As of

(in thousands)

December 31,

2025

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

Commercial real estate:

Commercial real estate - owner occupied

$293,706

$287,005

$262,988

$258,050

$273,397

Commercial real estate - non-owner occupied

885,870

871,807

846,990

838,634

845,298

Construction

248,560

236,590

218,840

215,613

221,086

Multi-family

571,468

565,102

573,208

549,220

530,853

1-4 family

60,661

66,735

45,171

48,450

46,496

Total commercial real estate

2,060,265

2,027,239

1,947,197

1,909,967

1,917,130

Commercial and industrial

1,273,997

1,264,111

1,259,171

1,229,098

1,151,720

Consumer and other

40,965

45,323

45,744

46,190

45,000

Total gross loans and leases receivable

3,375,227

3,336,673

3,252,112

3,185,255

3,113,850

Less:

Allowance for credit losses

35,877

36,690

36,861

35,236

35,785

Deferred loan fees

1,986

1,717

1,187

855

722

Loans and leases receivable, net

$3,337,364

$3,298,266

$3,214,064

$3,149,164

$3,077,343

DEPOSIT COMPOSITION

(Unaudited)

As of

(in thousands)

December 31,

2025

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

Non-interest-bearing transaction accounts

$378,770

$400,697

$396,448

$433,201

$436,111

Interest-bearing transaction accounts

1,103,696

1,050,233

1,047,434

1,015,846

965,637

Money market accounts

905,773

840,477

833,684

831,897

809,695

Certificates of deposit

284,764

300,703

255,533

181,751

184,986

Wholesale deposits

707,412

740,961

772,123

780,348

710,711

Total deposits

$3,380,415

$3,333,071

$3,305,222

$3,243,043

$3,107,140

Uninsured deposits

$1,220,177

$1,100,868

$1,069,509

$1,055,347

$980,278

Less: uninsured deposits collateralized by pledged assets

68,656

72,561

67,990

9,344

6,864

Total uninsured, net of collateralized deposits

1,151,521

1,028,307

1,001,519

1,046,003

973,414

% of total deposits

34.1%

30.9%

30.3%

32.3%

31.3%

SOURCES OF LIQUIDITY

(Unaudited)

As of

(in thousands)

December 31,

2025

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

Short-term investments

$8,714

$8,074

$72,520

$136,033

$128,207

Collateral value of unencumbered pledged loans

992,398

906,042

893,499

973,494

444,453

Market value of unencumbered securities

388,474

376,783

347,196

324,365

310,125

Readily accessible liquidity

1,389,586

1,290,899

1,313,215

1,433,892

882,785

Fed fund lines

45,000

Excess brokered CD capacity (1)

775,851

732,951

645,843

477,468

981,463

Total liquidity

$2,210,437

$2,068,850

$2,004,058

$1,956,360

$1,909,248

Total uninsured, net of collateralized deposits

1,151,521

1,028,307

1,001,519

1,046,003

973,414

PRIVATE WEALTH OFF-BALANCE SHEET COMPOSITION

(Unaudited)

As of

(in thousands)

December 31,

2025

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

Trust assets under management

$3,541,768

$3,543,594

$3,461,659

$3,184,197

$3,160,449

Trust assets under administration

272,910

270,222

268,996

240,366

258,255

Total trust assets

$3,814,678

$3,813,816

$3,730,655

$3,424,563

$3,418,704

NON-GAAP RECONCILIATIONS

Certain financial information provided in this release is determined by methods other than in accordance with generally accepted accounting principles (United States) (“GAAP”). Although the Company’s management believes that these non-GAAP financial measures provide a greater understanding of its business, these measures are not necessarily comparable to similar measures that may be presented by other companies.

TANGIBLE BOOK VALUE

“Tangible book value per share” is a non-GAAP measure representing tangible common equity divided by total common shares outstanding. “Tangible common equity” itself is a non-GAAP measure representing common stockholders’ equity reduced by intangible assets, if any. The Company’s management believes that this measure is important to many investors in the marketplace who are interested in period-to-period changes in book value per common share exclusive of changes in intangible assets. The information provided below reconciles tangible book value per share and tangible common equity to their most comparable GAAP measures.

(Unaudited)

As of

(Dollars in thousands, except per share amounts)

December 31,

2025

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

Common stockholders’ equity

$359,593

$346,327

$332,803

$324,071

$316,597

Less: Goodwill and other intangible assets

(11,985)

(12,041)

(12,049)

(12,058)

(11,912)

Tangible common equity

$347,608

$334,286

$320,754

$312,013

$304,685

Common shares outstanding

8,325,376

8,324,387

8,323,470

8,301,967

8,293,928

Book value per share

$43.19

$41.60

$39.98

$39.04

$38.17

Tangible book value per share

41.75

40.16

38.54

37.58

36.74

TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS

“Tangible common equity to tangible assets” (“TCE”) is defined as the ratio of common stockholders’ equity reduced by intangible assets, if any, divided by total assets reduced by intangible assets, if any. Adjusted TCE ratio is defined as TCE adjusted for net fair value adjustments of financial assets and liabilities. For more information on fair value adjustments please refer to Note 19 - Fair Value Disclosures in the annual report on Form 10-K for the year ended December 31, 2024. The Company’s management believes that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in common equity and total assets, each exclusive of changes in intangible assets. The information below reconciles tangible common equity and tangible assets to their most comparable GAAP measures.

As of

(Dollars in thousands)

December 31,

2025

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

Common stockholders’ equity

$359,593

$346,327

$332,803

$324,071

$316,597

Less: Goodwill and other intangible assets

(11,985)

(12,041)

(12,049)

(12,058)

(11,912)

Tangible common equity (a)

$347,608

$334,286

$320,754

$312,013

$304,685

Total assets

$4,081,887

$4,034,845

$4,002,725

$3,944,879

$3,853,215

Less: Goodwill and other intangible assets

(11,985)

(12,041)

(12,049)

(12,058)

(11,912)

Tangible assets (b)

$4,069,902

$4,022,804

$3,990,676

$3,932,821

$3,841,303

Tangible common equity to tangible assets

8.54%

8.31%

8.04%

7.93%

EFFICIENCY RATIO & PRE-TAX, PRE-PROVISION ADJUSTED EARNINGS

“Efficiency ratio” is a non-GAAP measure representing non-interest expense excluding the effects of the SBA recourse provision, impairment of tax credit investments, losses or gains on repossessed assets, amortization of other intangible assets and other discrete items, if any, divided by operating revenue, which is equal to net interest income plus non-interest income less realized gains or losses on securities, if any. “Pre-tax, pre-provision adjusted earnings” is defined as operating revenue less operating expense. In the judgment of the Company’s management, the adjustments made to non-interest expense and non-interest income allow investors and analysts to better assess the Company’s operating expenses in relation to its core operating revenue by removing the volatility that is associated with certain one-time items and other discrete items. The information provided below reconciles the efficiency ratio and pre-tax, pre-provision adjusted earnings to its most comparable GAAP measure.

(Unaudited)

For the Three Months Ended

For the Twelve Months Ended

(Dollars in thousands)

December 31,

2025

September 30,

2025

June 30,

2025

March 31,

2025

December 31,

2024

December 31,

2025

December 31,

2024

Total non-interest expense

$24,130

$25,700

$24,968

$24,719

$23,152

$99,519

$93,480

Less:

Net loss on repossessed assets

—

(8)

168

Impairment of tax credit investments

229

—

110

400

339

400

Contribution to First Business Charitable Foundation

—

234

—

234

—

SBA recourse (benefit) provision

(5)

(59)

—

(687)

(64)

(104)

Total operating expense (a)

$23,901

$25,440

$25,023

$24,617

$23,434

$98,983

$93,016

Net interest income

$34,762

$34,886

$33,784

$33,258

$33,148

$136,690

$124,206

Total non-interest income

7,461

9,640

7,255

7,579

8,005

31,937

29,251

Less:

Net loss on sale of securities

—

(8)

Bank owned life insurance claim

—

234

—

234

—

Adjusted non-interest income

7,461

9,406

7,255

7,579

8,005

31,703

29,259

Total operating revenue (b)

$42,223

$44,292

$41,039

$40,837

$41,153

$168,393

$153,465

Efficiency ratio

56.61%

57.44%

60.97%

60.28%

56.94%

58.78%

60.61%

Pre-tax, pre-provision adjusted earnings (b - a)

$18,322

$18,852

$16,016

$16,220

$17,719

$69,410

$60,449

Average total assets

$4,181,341

$4,043,516

$3,928,087

$3,842,368

$3,746,608

$3,999,878

$3,626,273